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24
MINING FOR CLOSURE
Table 1
Guidelines for framework policies
(summarised from (Miller, 2005))
Owner pays
Standard of
reclamation
Standard of
certainty
Timing of finan-
cial assurance
requirement
Transition ar-
rangements for
existing mines
Taxation
The exit ticket
Alternatives to
financial assur-
ance
Legislation should provide that the owner or operator is responsible for execution and completion
of successful reclamation activities to an appropriate technical standard. Where long-term care is
involved, the operator is responsible to provide it until relieved of liability.
Reclamation should return the site to a safe and stable condition, free of safety hazards (such as
unsafe buildings, equipment, open holes, etc.); return the mine site to viable and, wherever practi-
cable, self-sustaining ecosystems that are compatible with a healthy environment and with human
activities. There should be measures to address and prevent ongoing pollution from the site. There
should not be a blanket requirement to return the site to its original condition or to a condition
permitting particular land uses.
Closely related to the issue of standard of performance is the degree to which the government
seeks assurance against all possibility of loss or damage to the environment. If governments insist
on being indemnified against all possible events, excessive costs will be imposed and investment
incentive will be drastically reduced. Governments should have a general policy of requiring EFA
that is prudent in light of all reasonably foreseeable risks, but they should not insist on protection
against extremely unlikely events.
Any requirement for EFA, or any change in the required standard of reclamation, should be identi-
fied as early as possible in discussions between company and government.
44
If it is necessary for a government to alter the required standard of reclamation, or to require a
financial assurance instrument where none was required previously, the operator should be given
a reasonable time to comply with the requirements. In some cases, particularly where the mine is
only marginally profitable or is approaching the end of its life, a creative approach to the design of
the EFA may be called for.
All requirements for EFA impose some costs on the operator. In particular, hard forms of security
(such as letter of credit, cash bonds or trust funds) impose two kinds of cost: direct carrying cost
and loss of use of the funds for productive investment (or corresponding reduction in borrowing
power). It is appropriate that the tax regime of the country recognizes these costs and attempt to
minimize their negative effects.
It is reasonable to demand that Miners accept the costs and liability for environmental protection
of the site during operations and for reclaimed the site upon closure. Where conditions such as
acid mine drainage exist, it is reasonable that companies also accept the necessity of funding long-
term care and management. However, government legislation should provide explicitly that at a
certain moment the company can be relieved of future liabilities for the site. In most cases, this
relief would be given as soon as site reclamation has been successfully completed. In the case of
acid drainage, it would be given as soon as necessary funding arrangements have been established
for long-term care.
45
It is known that the insurance industry is now in a position to offer certain vehicles to supplement
or replace existing EFA instruments. At the same time, international standards for environmental
quality management, such as the ISO 14000 series, are becoming more widely practised and ac-
cepted. This raises the possibility that a practical certification or accreditation system may ensue,
giving governments additional confidence in accredited companies.
44. In Ontario for example, a review is normally performed every
five years or at the call of the responsible minister in the jurisdic-
tion (personal communication: Natural Resources Canada, 2005,
2 August).
45. However, this remains a topic for debate for sites with ongoing
pollution challenges such as acidic drainage and true “walk-away”
conditions may not be achievable. One officer of a prominent ju-
risdiction at least is
“not sure that we will ever see an exit ticket with
acidic drainage present on site”
(personal communication: Natural
Resources Canada, 2005, 2 August).